Fair(ly unaffordable) Housing

April is Fair Housing Month.  This April marks the 44th anniversary of the Fair Housing Act, which prohibits discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, sex, (and as amended) handicap and family status.  Earlier this year, the U.S. Dept. of Housing & Urban Development (HUD) implemented a policy to further ensure that HUD funded programs are open to all eligible individuals and families regardless of sexual orientation, gender identity, or marital status, as these categories are not protected classes under the Civil Rights Act.

With all of the groups we seek to protect from discrimination, we rarely talk about the group that encounters that largest barriers to housing - the poor.  No matter how many groups we extend anti-discrimination protections to, the simple fact is that a large chunk of the population simply cannot afford housing.

The National Low Income Housing Coalition recently released their annual report on housing affordability, Out of Reach2012:  America’s Forgotten Housing Crisis.  Before I outline some of the significant details of the report, I want you to take a minute to calculate what percentage of your monthly gross income goes towards housing (mortgage/rent & basic utilities).  

 

Housing is considered “affordable” by federal standards when no more than 30% of a household’s gross income is spent on gross housing costs.  I'm part of a DINK (doube-income, no kids) household.  My partner and I are both college educated and gainfully employed.  As a result, our housing is extremely affordable compared to this federal standard.  In 2011, our total housing costs accounted for only 14.45% of our gross household income.

For a significant portion of Kentuckians, however, housing affordability is a virtual impossibility.  

The Fair Market Rent for a two-bedroom housing unit in Kentucky is $616 – which includes rent and utilities.  To “afford” a $616 a month apartment, a household has to have an annual income of $26,648.  Roughly 23% of Kentucky families have a household income less than $25,000.  In other words, 1 in 4 Kentuckians cannot afford a two-bedroom apartment.

The $26,648 gross annual salary required to afford a two-bedroom apartment translates to an hourly wage of $11.85.  A full-time (40 hours a week, 52 weeks a year) minimum wage worker in Kentucky only earns $15,080 a year.  So, a minimum wage earner would have to work 65 hours per week every week of the year to afford this two bedroom apartment.

The housing outlook is even more dire for Kentuckians who are unable to work due to disability.  In 2010, 7.9% of Kentuckians were receiving SSDI benefits, and another 4.4% were receiving SSI benefits.  Currently, the average Social Security benefit (retired or disabled) in the U.S. is $1,124 a month, equaling an annual income of $13,488.  Based on this average, a household whose only income is Social Security would have a housing burden of 55% if they were renting a $616 two-bedroom apartment, leaving them only $508 to meet all of their other basic needs (such as food, medical costs, and transportation).  The standard SSI benefit in Kentucky for 2012 is $698 a month, equaling an annual income of only $8,376.  A household whose only income is SSI would have a housing burden of 88% renting a $616 two-bedroom apartment, leaving them only $82 for all other expenses.

At this point, you might be thinking, "Surely the social safety net helps house these very low-income Kentuckians?  That's what's Section 8 is for, right?"  Wrong.  Only about 86,000 of low-income renters in Kentucky benefit from federal rent assistance programs.  Over 113,000 low-income Kentucky households continue to pay at least half of their monthly income for housing.   

Furthermore, rental assistance programs requiring tenants to pay 30% of their gross income towards rent do not take into consideration other economic realities, especially in rural areas.  Let's use my hometown as an example.  Let's pretend that my life turned out very differently than it has.  I'm still living on Bull Creek, and all I have is a high school education.  The only job I can find is at Wendy's in nearby Hazard, working for minimum wage.  I'm working full time, and grossing $1,256 a month.  After taxes and deductions, I'm left with only about $1,000 a month.  I've been fortunate enough to get a Section 8 voucher for my housing.  My rent obligation would be $377 a month, leaving me $623 for all of my other expenses.  Since there's no public transportation, I'd have to have a car to get to work.  I'd probably have a late-model, gas guzzling car.  Even without a car payment, I'd probably be spending around $150-$175 a month on gas.  Additionally, I'd probably be spending at least $100 a month on car insurance (since I'd be poor and likely have really bad credit).  With transportation out of the way, that leaves me $348 a month in income.  I'll need phone service, and the cheapest plan I could get would be about $45.  With a gross monthly income of $1,256 and a household size of only one, I would not qualify for food stamps, so I'd probably end up spending about $50 a week on food.  That leaves me $103 a month for hygiene and household supplies and any other basic needs or emergencies that arise.  Even with "affordable" housing, I'm barely able to meet all of my basic needs.

This Fair Housing Month, I challenge you to think about fairness in a larger sense; I challenge you to think about class and economic fairness, about housing affordability and a living wage.  And, if you have a roof over your head and food in your cupboard, take a few moments to reflect on your good fortune.